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CNI Shares Rise 4.3% Since Third-Quarter 2026 Earnings Release
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Key Takeaways
CNI's Q3 earnings beat estimates by 3.4%, while revenues rose 15% year over year to C$4.77 billion.
Automotive revenues rose 30.9%, while grain & fertilizers gained 19.1%, driving freight growth.
CNI's free cash flow rose 35.7%, while management reaffirmed its 2026 earnings growth outlook.
Canadian National Railway Company (CNI - Free Report) reported third-quarter 2026 earnings of $1.54 per share, beating the Zacks Consensus Estimate of $1.49 by 3.4%. In Canadian dollars, adjusted earnings increased 18% year over year to C$2.16 per share.
The better-than-expected company’s stock rose 4.3% since its earnings release on Oct. 30, 2026.
Revenues increased 15% year over year to C$4.77 billion ($3.41 billion), surpassing the Zacks Consensus Estimate of $3.28 billion by 4.1%. Results benefited from broad-based freight growth, higher fuel surcharge revenues and productivity gains. Revenue ton-miles (RTMs), a measure of freight volumes, increased 4% year over year.
Canadian National Railway Company Price, Consensus and EPS Surprise
Freight revenues, accounting for approximately 96% of total revenues, increased 14.6% year over year to C$4.57 billion. Other revenues climbed 13.2% to C$197 million.
Freight revenues per RTM increased 10.3% year over year to 7.70 cents, while revenue per carload rose 14.9% to C$3,353. Higher fuel surcharge collections, favorable pricing and business mix supported revenue growth despite largely flat carload volumes.
Canadian National's Freight Business Shows Strength
Petroleum and chemicals revenues increased 17.1% year over year to C$1 billion, supported by refined petroleum and crude oil shipments. Metals and minerals revenues rose 17.6% to C$561 million, reflecting higher freight volumes and longer-haul shipments.
Grain and fertilizers revenues climbed 19.1% to C$923 million, supported by stronger Canadian grain shipments. Automotive revenues rose 30.9% to C$284 million, benefiting from increased vehicle imports and market share gains.
Intermodal revenues increased 8.7% to C$1.07 billion, while forest products revenues advanced 9.8% to C$495 million. Coal revenues rose 3.8% to C$246 million despite a decline in shipment volumes.
CNI Reports Higher Operating Income Despite Costs
Reported operating income increased 7.7% year over year to C$1.73 billion. Adjusted operating income rose15.9% to C$1.86 billion, reflecting revenue growth and productivity improvements.
Total operating expenses increased 18.8% to C$3.04 billion. Fuel expenses rose 58.4% to C$662 million, while labor and fringe benefits expenses increased 6.9% to C$871 million. Purchased services and material expenses rose 11.7% to C$628 million.
The quarter included C$118 million in asset impairment charges related to discontinued technology projects and C$14 million in rail consolidation-related advisory costs.
The reported operating ratio deteriorated 230 basis points to 63.7%. However, the adjusted operating ratio improved 40 basis points to 61%, reflecting improved underlying cost efficiency. Higher fuel prices negatively affected the operating ratio by approximately 60 basis points.
Canadian National Maintains Its 2026 Outlook
Canadian National reaffirmed its expectation for adjusted earnings per share to grow in the mid-to-high single-digit range in 2026. Management indicated that performance was tracking toward the upper end of the guidance range.
The company continues to anticipate low-single-digit RTM growth for the year. Strong grain demand, energy shipments and automotive volumes are expected to support performance, while international intermodal and forest products remain exposed to market headwinds.
Management expects capital expenditures of approximately C$2.8 billion in 2026, net of customer reimbursements. The company also anticipates further improvement in free cash flow conversion.
CNI Generates Higher Free Cash Flow
Net cash provided by operating activities totaled C$1.90 billion during the third quarter compared with C$1.91 billion in the year-ago period. Free cash flow increased 35.7% to C$1.08 billion from C$793 million, supported by lower investment spending.
For the first nine months of 2026, free cash flow increased 24.6% to C$2.92 billion, reflecting disciplined capital allocation. Gross property additions declined to C$1.94 billion from C$2.43 billion in the prior-year period.
Canadian National repurchased approximately 3.9 million shares for C$676 million during the third quarter. Its board also approved a quarterly dividend of C$0.915 per share, payable on Dec. 30, 2026, to shareholders of record on Dec. 9.
The company's adjusted debt-to-adjusted EBITDA ratio stood at 2.61 times at September-end compared with 2.54 times a year earlier.
Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.
Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%.
Wabtec Corporation (WAB - Free Report) reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same.
Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion.
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CNI Shares Rise 4.3% Since Third-Quarter 2026 Earnings Release
Key Takeaways
Canadian National Railway Company (CNI - Free Report) reported third-quarter 2026 earnings of $1.54 per share, beating the Zacks Consensus Estimate of $1.49 by 3.4%. In Canadian dollars, adjusted earnings increased 18% year over year to C$2.16 per share.
The better-than-expected company’s stock rose 4.3% since its earnings release on Oct. 30, 2026.
Revenues increased 15% year over year to C$4.77 billion ($3.41 billion), surpassing the Zacks Consensus Estimate of $3.28 billion by 4.1%. Results benefited from broad-based freight growth, higher fuel surcharge revenues and productivity gains. Revenue ton-miles (RTMs), a measure of freight volumes, increased 4% year over year.
Canadian National Railway Company Price, Consensus and EPS Surprise
Canadian National Railway Company price-consensus-eps-surprise-chart | Canadian National Railway Company Quote
CNI Benefits From Broad-Based Freight Growth
Freight revenues, accounting for approximately 96% of total revenues, increased 14.6% year over year to C$4.57 billion. Other revenues climbed 13.2% to C$197 million.
Freight revenues per RTM increased 10.3% year over year to 7.70 cents, while revenue per carload rose 14.9% to C$3,353. Higher fuel surcharge collections, favorable pricing and business mix supported revenue growth despite largely flat carload volumes.
Canadian National's Freight Business Shows Strength
Petroleum and chemicals revenues increased 17.1% year over year to C$1 billion, supported by refined petroleum and crude oil shipments. Metals and minerals revenues rose 17.6% to C$561 million, reflecting higher freight volumes and longer-haul shipments.
Grain and fertilizers revenues climbed 19.1% to C$923 million, supported by stronger Canadian grain shipments. Automotive revenues rose 30.9% to C$284 million, benefiting from increased vehicle imports and market share gains.
Intermodal revenues increased 8.7% to C$1.07 billion, while forest products revenues advanced 9.8% to C$495 million. Coal revenues rose 3.8% to C$246 million despite a decline in shipment volumes.
CNI Reports Higher Operating Income Despite Costs
Reported operating income increased 7.7% year over year to C$1.73 billion. Adjusted operating income rose15.9% to C$1.86 billion, reflecting revenue growth and productivity improvements.
Total operating expenses increased 18.8% to C$3.04 billion. Fuel expenses rose 58.4% to C$662 million, while labor and fringe benefits expenses increased 6.9% to C$871 million. Purchased services and material expenses rose 11.7% to C$628 million.
The quarter included C$118 million in asset impairment charges related to discontinued technology projects and C$14 million in rail consolidation-related advisory costs.
The reported operating ratio deteriorated 230 basis points to 63.7%. However, the adjusted operating ratio improved 40 basis points to 61%, reflecting improved underlying cost efficiency. Higher fuel prices negatively affected the operating ratio by approximately 60 basis points.
Canadian National Maintains Its 2026 Outlook
Canadian National reaffirmed its expectation for adjusted earnings per share to grow in the mid-to-high single-digit range in 2026. Management indicated that performance was tracking toward the upper end of the guidance range.
The company continues to anticipate low-single-digit RTM growth for the year. Strong grain demand, energy shipments and automotive volumes are expected to support performance, while international intermodal and forest products remain exposed to market headwinds.
Management expects capital expenditures of approximately C$2.8 billion in 2026, net of customer reimbursements. The company also anticipates further improvement in free cash flow conversion.
CNI Generates Higher Free Cash Flow
Net cash provided by operating activities totaled C$1.90 billion during the third quarter compared with C$1.91 billion in the year-ago period. Free cash flow increased 35.7% to C$1.08 billion from C$793 million, supported by lower investment spending.
For the first nine months of 2026, free cash flow increased 24.6% to C$2.92 billion, reflecting disciplined capital allocation. Gross property additions declined to C$1.94 billion from C$2.43 billion in the prior-year period.
Canadian National repurchased approximately 3.9 million shares for C$676 million during the third quarter. Its board also approved a quarterly dividend of C$0.915 per share, payable on Dec. 30, 2026, to shareholders of record on Dec. 9.
The company's adjusted debt-to-adjusted EBITDA ratio stood at 2.61 times at September-end compared with 2.54 times a year earlier.
Currently, CNI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q3 Performance of Other Transportation Companies
Alaska Air Group, Inc. (ALK - Free Report) reported third-quarter 2026 adjusted earnings of 36 cents per share, excluding certain tax impacts, beating the Zacks Consensus Estimate of 35 cents by 2.9%. The company reported adjusted earnings of $1.05 per share a year earlier. Higher fuel expenses weighed on profitability despite strong revenue momentum.
Operating revenues increased 14.4% year over year to $4.30 billion but missed the consensus mark of $4.31 billion marginally by 0.1%.
Wabtec Corporation (WAB - Free Report) reported mixed third-quarter 2026 results, wherein earnings surpassed the Zacks Consensus Estimate while revenues missed the same.
Quarterly earnings (excluding 41 cents from non-recurring items) of $2.83 per share beat the Zacks Consensus Estimate of $2.72 by 4.04% and increased 22% year over year. Revenues climbed 8.1% year over year to $3.12 billion but missed the consensus mark of $3.18 billion by 2%. The 12-month backlog increased 8.8% to $8.99 billion.